In the best year for the freight transportation industry since the Great Recession, logistics managers chalk up efficiencies that drive further U.S. economic growth. However, capacity issues persist, causing shippers to worry about rate hikes as carriers continue to be meticulous in their partnerships.

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Last week, the leadership of the House Transportation and Infrastructure Committee introduced legislation designed to reform Federal Aviation Administration (FAA) programs, set policies and priorities for United States aviation systems, and create jobs through infrastructure improvements.

Since the previous FAA authorization expired in 2007, it has been kept afloat by a series of 17 extensions, also known as continuing resolutions.

The four-year bill, which covers fiscal years 2011 to 2014 with an overall funding level of $59.7 billion is comprised of various measures, including:
-providing approximately $4 billion in savings compared to current funding levels;
- streamlines processes and provides funding for priority NextGen air traffic control modernization projects planned in the next four years and sets deadlines and metrics for better measurement of NextGen progress and to ensure more effective cost management; and includes binding arbitration for air traffic controllers and other FAA employees to resolve labor impasses.
Absent from the bill, though, is a labor-related provision which has served as a bone of contention between parcel industry heavyweights FedEx and UPS.

In previous versions of this legislation, a measure in the House version which called for “express carrier employee protection” which has the potential to change the labor status for FedEx Express employees—except for pilots and aircraft maintenance workers— from Railway Labor Act (RLA) to the National Labor Relations Act, which applies to UPS employees. And as LM has previously reported, if this bill with this provision were to be signed into law, many industry experts contend that it will make it less challenging for the Teamsters Union to organize FedEx Express workers.

An amendment in previous versions introduced by Former House T&I Committee Chairman James L. Oberstar-aimed to amend the RLA to clarify that employees of an “express carrier” shall only be covered by the RLA if they are employed in a position that is eligible for certification under FAA’s rules such as mechanics or pilots, and they are actually performing that type of work for the express carrier. It added that all other express carriers would be governed by the NLRA. The Senate version of this bill in the previous Congress did not include this amendment.

Since this amendment was first introduced, FedEx has steadily maintained that this amendment is essentially a bailout for UPS.

In literature for its campaign entitled BrownBailout.com, FedEx says that this amendment would force FedEx Express to operate under a law not designed for airlines and express companies. FedEx has previously defended its position by explaining that UPS and FedEx are “fundamentally different companies,” with UPS shipping 85 percent of its parcels on the ground, and FedEx primarily functioning as an airline, flying 85 percent of its packages in the air.

And in comments provided to LM by FedEx late last year, the company said:
“We hope the new Congress will act quickly to develop and pass a new bill, without the anti-competitive bailout provision that benefits only UPS, and has nothing to do with the bill’s main purpose. It was clear from the election that voters are tired of backroom deals that put corporate interests ahead of the public good. Americans deserve the benefits of important air safety improvements and next generation navigation systems, as well as the thousands of jobs that will be created by improving airport infrastructure.”

About the Author

Jeff BermanGroup News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

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